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21 February 2010

Films and the Copyright Amendment

In 2006, the Copyright Office first put up a draft of proposed amendments to the Copyright Act on its website. Since then, the proposed amendments appear to have been revised (if media reports are anything to go by). On December 24, 2009, the PIB released information about the proposed copyright amendments. Although the press release did not include the specific provisions of the bill, among other things, it stated:

“Amendment is proposed to give independent rights to authors of literary and musical works in cinematograph films, which were hitherto denied and wrongfully exploited, by the producers and music companies.

An amendment is proposed to ensure that the authors retain their right to receive royalties and the benefits enjoyed through the copyright societies.

Another amendment ensures that the authors of the works, particularly songs included in the cinematograph film or sound recordings, receive royalty for the commercial exploitation of such work.”

While that in itself certainly sounds fantastic, it isn’t entirely clear whether the proposed amendments would actually have the effect which they aim to realise. Under copyright law, creators of works which are protectable by copyright (such as literary works including film scripts, the lyrics of songs used in films, music compositions, and choreographic works i.e. dance sequences used in films) are all referred to as authors. So an amendment which aimed to protect authors would include within its scope script writers, lyricists, choreographers, and music composers. However, the mere fact that all of these persons would fall within the scope of the copyright amendment since they are “authors” under copyright law would not automatically mean that the amendment would have any effect whatsoever on them.

Also, proposing to protect authors is not quite the same as actually managing to protecting authors. To be able to protect authors, it would be important to draft the proposed law extremely carefully especially since laws tend not to be tailored to particular situations. Laws tend to make sweeping generalisations about the entire spectrum of situations despite the fact that they are always applied to individual circumstances. And as such, it is imperative that laws be drafted in such a manner that they achieve their objective in all circumstances.

This does not appear to have been the the case with the proposed copyright amendments though. The Indian SpicyIP blog, has released some of the provisions of the proposed amendments which would be applicable to films and to the underlying works in films i.e. the copyrighted works based on which films are made such as their scripts, the lyrics and music compositions. Assuming blog is correct, the proposed amendments say:

Section 19(9)
No assignment of copyright in any work to make a cinematograph film or sound recording shall affect the right of the author of the work to claim royalties in case of utilization of the work in any form other than as part of cinematograph film or sound recording.

Section 18
Provided further that no such assignment shall be applied to any medium or mode of exploitation of the work which did not exist or was not in commercial use at the time in the assignment was made, unless the assignment specifically referred to such medium or mode.
Provided further that the author of the literary or musical work included in cinematograph film or sound recording shall not assign the right to receive royalties from the utilization of such work in any other form other than as part of cinematograph film or sound recording except to the legal heirs or to a copyright society for collection and distribution and any contract to contrary shall be void.

There are also proposed amendments in respect of the authorship of films which state:

Section 17 (f)
In the case of cinematograph film produced on or after the coming into force of this clause, the producer and the principal director shall be treated jointly as the first owner of copyright.Section 17 (g)
In case of cinematograph film produced before the commencement of clause (f) the principal director shall enjoy the copyright for a period of 10 years after the expiry of the duration of copyright in the cinematograph film subject to the principal director entering into a written agreement with the owner of the copyright in the film during the subsistence of copyright.
Provided further that such an agreement is not needed in case where the owner and principal director on the film is the same person.

Authorship

Films are called “cinematograph films” in the Copyright Act, and their producers are defined as their authors, and consequently, as the persons who own the copyright in them. The proposed amendment seeks to change this by making both the producer and the principal director of a film joint owners of the copyright in that film.

The current term of copyright in respect of a film is sixty years from its publication. This is a reflection of the understanding that film producers are often companies, and do not have a year of death, so the copyright term which applies, say, to books (whose authors are human) of life plus sixty years after death would be inconvenient.

Under the proposed amendment, for films which have already been made, the term of copyright would not change for the producer but the principal director would enjoy the copyright in the film for 10 extra years after the sixty-year post-publication copyright term expired if he entered into a written agreement (of unspecified nature) with the owner of the copyright in the film (i.e. usually the producer) before the expiry of the sixty-year copyright term.

This would bring the total length of time for which a film could be protected by copyright to seventy years after its publication. Whether term extensions benefit anyone other than companies which accumulate copyrights is debatable.

Exploitation through Future Technologies

The proposed amendment precludes authors of an underlying works in films (and all other assignors of copyright although the authors of an underlying works in films are focussed on here) from assigning their copyrights so as to assign the right to exploit their works through undiscovered, unspecified and non-existent media [Section 19(9)]. This is relatively clear. Copyright is not indivisible: it comprises a bundle of rights. Each of those rights is a right to do something in relation to a copyrighted work such as communicate it to the public, and each one of those rights may be exploited in one or more specific ways. For example, a film may be communicated to the public in a theatre, via VCD or via satellite TV. Each one of those modes of communication would require the exercise of slightly different rights contained within the copyright umbrella.

There has been some confusion at law as a result about what assigning a copyright means in terms of whether it means copyright has been assigned for the purpose of exploitation using only modes of exploitation existing at the time of the assignment or also using modes of exploitation subsequently created/developed. For example, would a 1965 assignment allow the copyright assigned to be exploited by Internet streaming which would not have been contemplated in 1965?

In Maganlal Savani v. Rupam Pictures (P) Ltd., [AIR 2000 Bom 416] with reference to an agreement between parties assigning the right of exploitation, distribution and exhibition of motion pictures, the Bombay High Court held that ‘exploitation’ includes exploitation by all scientific and technological devices that may be invented in future. In Raj Video Vision v. K Mohanakrishnan: [AIR 1998 Mad 294], the Madras High Court held precisely the opposite. In that case, with reference to the assignment of video and television rights, it was held that a party could not have assigned rights which were not contemplated at the time of the original agreement (in 1961) at which time neither party could have dreamt of later scientific advancements, and that those rights could not have been granted by way of assignment.

When the authors of underlying works in films are required to sign assignments of the copyright in their works in favour of film producers, there has been a distinct trend to incorporate a clause in the relevant agreements saying that the rights assigned “may be exploited using any technology currently known or developed in the future”. This proposed amendment to copyright law would make the incorporation of such clauses impossible if it were to become law. For the authors of underlying works, what that means is that if new modes for the exploitation of their works are created, their permission would have to be sought to actually exploit their works using those new modes of exploitation. In other words, the authors would have to grant a separate licence or assignment for their works to be exploited using the new mode of exploitation — this would obviously be a revenue opportunity for them.

Exploitation Independent of Films
The provisions which deal with the exploitation of rights in underlying works of films independently of the films for which they are created are considerably less clear. One says that no assignment of copyright in any work to make a film shall affect the right of the author of the work to claim royalties in case of utilization of the work in any form other than as part of the film. The second says that the author of the literary or musical work included in a film shall not assign the right to receive royalties from the utilization of such work in any other form other than as part of the film except to the legal heirs or to a copyright society for collection and distribution and any contract to contrary shall be void.

Both these provisions are provisions which deal specifically with the underlying works in a film, and have been drafted to address a specific problem — that of the authors of underlying works not being able to have a share in the revenues generated from the exploitation of their works not in conjunction with the film. For example, lyrics and music i.e. songs may be performed at public performances. The persons who create them should get a share in the revenues generated at concerts where their works are performed but this is not what has been happening.

There was a time when the authors of underlying works were not entitled to a share in such revenues which were raised otherwise in conjunction with the film. That time, however, passed years ago. Here’s the story in a nutshell:

Films were, prior to 1994, defined so that a film included the associated soundtrack. Based on this definition, the Supreme Court held, in the 1977 IPRS case, that the copyright in music compositions and lyrics contained in a film belongs not to the authors who write them (i.e. music composers and lyricists) but to the author of the film (i.e. its producer) since music and lyrics contribute to the soundtrack which is an integral part of the film. Thus, music composers and lyricists had no copyrights to speak of with respect to the copyright in the works they composed for films.

The legal position changed in 1994 through an amendment of the Copyright Act with the definition of a film being changed to include its associated sound recording (and not the soundtrack). What this meant is : (a) that music and lyrics could no longer be treated as an integral and undifferentiated part of the film itself, (b) that the underlying works were distinct works which their authors owned and not the producer of the film, and (c) that in the absence of a contract to the contrary, the producer had only the right to use and exploit the underlying works in conjunction with the film.

Quite obviously, producers (which are synonymous with large production houses, and are associated with record companies) did not want to give up the rights they had enjoyed prior to the 1994 and so chose to abide by the 1977 Supreme Court judgment. The Constitution of India says that the law declared by the Supreme Court is binding on all Courts within the territory of India, and it is also the judiciary which interprets laws passed by the legislature. Unfortunately, the conclusion reached in the 1977 judgment has not been revisited by the judiciary with reference to the 1994 amendment of the statute. As a result, it has been possible to claim that the 1977 judgment is definitive despite a subsequent amendment clearly saying that the law has changed.

Cut to the present. Using the 1977 judgment, producers and record companies have denied the authors of underlying works their copyrights and the revenues gained from the exploitation of their copyrights. It is this situation which the proposed amendments seeks to change.

Although the proposed amendments which would benefit the authors of underlying works would apply to all the authors of underlying works such as scriptwriters, music composers and lyricists, their scope, for all practical purposes, is limited to the exploitation of underlying works other than in conjunction with the film. So although, for example, scriptwriters are technically included in the class of the authors of underlying works, the proposed amendments would not really make a difference to them.

The proposed amendments state that even if the author of an underlying work assigns the copyright in his work, he will still have the right to claim royalties for the exploitation of his work otherwise than in conjunction with the film. He may not assign the right to receive such royalties to anyone but his legal heirs or a copyright society (which administers copyrights).

What this means is that, say, if a song from a film is used as a ringtone by a mobile company, the lyricist and music composer could claim royalties even if they had assigned the copyright in their works i.e. lyrics and music respectively. Their ability to allow someone else to receive such royalties would be restricted to their heirs and to a copyright society.

The effect of these proposed amendments if they were to become law would be to open a can of worms. Building on the same example: to whom would the mobile company pay royalties? The proposed amendments do not say that the works themselves may not be assigned, only that a right to royalty exists despite assignment. Assuming that the underlying works are assigned to the producer as is usually the case, the record company would have to pay royalties to the producer since, as the assignee, the producer would be required to have granted a copyright licence if the works were to be exploited by the mobile company without the pall of copyright infringement. The music composer would also have a right to royalties, as would the lyricist although it isn’t clear whether the mobile company would have to pay them directly or if the producer would have to pay them. The ratio in which royalties would be shared isn’t clear either. The producer would be able to initiate infringement proceedings if a copyright licence was not executed with it. If a payment was made to one or more of the parties entitled to royalties, it isn’t clear whether the unpaid parties could ask (a) the paid parties for a share or (b) the mobile company for royalties or (c) both the mobile company and the paid parties by initiating legal proceedings for the recovery of money.

If at all copyright contracts were to be regulated, that should be done in a far more well-thought out manner than appears to be the case. Statutes can be used to protect authors whom business models do not protect. The moral rights of an author with respect to his or her work are non-waivable in some jurisdictions like Germany. The US Copyright Act gives authors a nonwaivable right to terminate their copyright transfers after a prescribed period. With respect to copyright assignments, the 1914 Indian Act (in which the 1911 English Act was effectively a schedule) contained a possible reversionary clause in favour of the heirs of authors which kicked in 25 years after the death of the author. The current Indian Act contains clauses which deal with resale rights.

Instead of creating an extremely confused and confusing situation, what could be done to aid the authors of underlying works is to simply state that they retain all rights of exploitation which have not been assigned. Short, clear, and simple — attributes which few lawyers treat as virtues, unfortunately.

Conclusion

Defining the principal director of a film as a joint author would certainly accord him a position of strength. However, with respect to the other proposed amendments which deal with the exploitation of underlying works in films otherwise in conjunction with the films themselves, the law, as it exists, protects authors of underlying works and states that the authors of underlying works own the copyright in their works. As far as the Copyright Act is concerned, the problem isn’t quite so much that the law is flawed but that the law isn’t followed.

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